OPEC Sticks With Existing Policy Of Monthly Oil Output Increase

With all the uncertainty growing again surrounding oil demand due to the new Omicron variant, OPEC and its allies agreed to stick to their existing policy of monthly oil output increases.

This is despite fears that the United States and other countries’ release from crude reserves would lead to huge oil price decline. Prior to the meeting, there was a thought that OPEC might consider options such as pausing the planned January increase, or raising output by a smaller amount.

Under its existing pact, OPEC+ agreed to raise 400,000 barrels per day each month, winding down record cuts which were agreed to in 2020 when demand crashed because of the pandemic. Oil prices did get hit on the announcements as West Texas traded below $67 before recovering a bit.

OPEC and OPEC+ have been resisting the United States requests for speedier increases in oil output to help the global economy, fearing that oversupply could hurt a fragile energy sector recovery.